• ‘90’s Flashback

    Posted on August 15, 2018 by Gemmer Asset

      Ahhh, that takes me back to simpler times. Pets.com, flip phones, Netscape web browsers. Now while Prince’s song was referring to the world ending at the turn of the millennium, for emerging market investors the world actually came close to ending in 1997 and 1998. Both Thailand and Russia ran into some financial difficulties and Long-Term Capital Management managed to implode in an entertaining fashion. The Fed cut rates as a result and this…
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  • Do Liquid Alternatives Help A Portfolio’s Risk Adjusted Return?

    Posted on August 14, 2018 by Gemmer Asset

    I won’t beat around the bush, the answer to this question is, like many things, nuanced. It really depends on the alternative fund/vehicle you use. Obviously with hindsight we can pick the best fund, but its another story when you’re trying to make a judgement about whether or not an alternative fund will be additive to your portfolio ex-ante.   Morningstar came out with an interesting paper on this topic. In it, Jason Kephart attempts…
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  • Market Recap

    Posted on August 3, 2018 by Gemmer Asset

      A mixed week for equities. U.S. stocks were generally higher with the S&P picking up +0.8% and small-caps +0.6%. The NASDAQ managed a +1.0% gain as Apple’s market cap surpassed $1 trillion as you can see below – read more here, the first U.S. company to achieve this feat.     It is hard to believe that Steve Jobs died in 2011 when Apple had a market cap of ‘just’ $300bn.   International equities,…
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  • Apple Hits $1 Trillion

    Posted on August 2, 2018 by Gemmer Asset

      Well, it finally happened. On the back of a very positive earnings release, Apple hit $1 trillion in market cap.  That’s a “1” followed by 12 zeros…   Its hard to remember those pre-iPhone days, but amazingly it wasn’t that long ago. The first iPhone was released in June of 2007. To put the recent news in perspective, the company’s market cap was $91 billion back then… that’s a $909 billion dollar increase!!  …
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  • Currency Moves

    Posted on August 1, 2018 by Gemmer Asset

    There have been some big currency moves lately, particularly in the emerging world (Argentina – I’m looking at you!).  In fact, not a single emerging market currency has appreciated versus the dollar over the past six months, with the average loss being -9.4%! Turkey and Latin America have been hurt particularly bad.     Down -42%, -34%, -18%… these moves are huge, particularly for currencies. The effect this type of currency depreciation has on a…
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  • Market Recap

    Posted on July 27, 2018 by Gemmer Asset

      Corporate Earnings – A Solid Foundation   If you are a Facebook investor, it was a tough week. The stock opened Thursday morning 20% lower than where it closed on Wednesday. As part of its second quarter earnings report it predicted slower growth in future quarters.     For all the wailing, we shouldn’t lose sight of the fact that the shares had been on a tear going into this week. Before the earnings…
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  • Always Look Under The Hood

    Posted on by Gemmer Asset

    “FANG” has become a popular term in finance circles over the past few years (or more recently “FAANG”). It’s an abbreviation for 4 (or 5) major US tech companies Facebook, Amazon, Netflix and Google – the second A in “FAANG” stands for Apple. And because these days there is an ETF for everything (see here and here), there is an ETF for this new acronym – its ticker is of course: FNG.   This new…
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  • Housing – Is the Bloom off the Rose?

    Posted on July 24, 2018 by Gemmer Asset

    There has been some interesting housing data over the last couple days that might point towards a marked slowdown coming, at least in certain markets.   June Existing Home Sales   Existing home sales slipped 0.6% in June from the previous month and are now down 2.2% year-over-year. This is now the third month in a row of lower sales. The decline is pretty small given the run up of the last few years, but…
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  • Is High Yield Worth The Risk?

    Posted on July 19, 2018 by Gemmer Asset

    Given where credit spreads are (see below) and the fact that we’re late in the economic cycle, it’s worth asking the question: is taking high yield credit risk worth it?     If you look at yield alone, the roughly 6% you’re getting from junk bonds is certainly appealing, but we’d argue that there are three main risks to having this type of credit exposure at this stage in the cycle.   High Yield Spreads…
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  • Market Recap

    Posted on July 13, 2018 by Gemmer Asset

      Inflation Heats Up – Bond Yields Go Nowhere   Sometimes the link between the economic data and the market reaction can leave you scratching your head. For example, this week’s inflation report was on the hot side. The Consumer Price Index (CPI) increased at an annualized rate of +2.8% in June while the core rate was up +2.0%. Both were slightly above expectations. The graph below shows four different measures of inflation, but you…
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